Question:
Question from Nick: My Advantage Plan hospital co-pay is going up over 500% from 2026 to 2027. My wife’s plan is also going to have a $700 drug deductible next year that she didn’t have in 2026. Many of my friends are losing their Advantage Plans in 2027. Why is all this happening?
Answer:
Answer: It’s very simple. Almost all Advantage Plan companies either lost money or made very minimal profit the last three years. When that happens, insurance companies pass on more expenses to the consumer in the form of higher premiums, additional out of pocket medical and prescription costs, less “free stuff” like dental, vision, Over the Counter (OTC) allowances or all of the above.
Some plans have been so unprofitable in certain parts of the country, the companies just did away with them altogether. There are estimates that as many as 3 million seniors’ plans have been terminated for 2027. However, this isn’t necessarily a bad thing and It’s extremely important that those who are losing plans understand they have what is likely a once in a lifetime opportunity to enroll into a Medicare Supplement regardless of their current or past medical history being taken into consideration, using what is known as Guaranteed Issue Rights.
As I’ve written about on a number of occasions over the last few weeks, people on Advantage Plans need to be aware of major changes to many plans for 2027. Maybe the most concerning to me are the large inpatient hospital co-pay increases. Many plans are moving from an affordable, flat hospital co-pay of $300 to $500, regardless of how long the stay is, to very expensive per day charges. I’ve seen 2027 plans that have a $650 per day co-pay for up to 4 days ($2,600 total), and many other plans that are $300 to $400 per day for as many as 7 days (up to $2,800 total).
Other major changes to Advantage Plans include the addition of a prescription drug deductible as high as $700 in 2027 that didn’t exist in 2026, as well as an increase in Tier 3 drug co-pays from $40 to $47 for a 30-day supply to 20% or 25% coinsurance for the same medication. To use Monjuaro as example, someone who had no drug deductible and a $45 co-pay spent a total of $540 on that medication in 2026. In 2027, they will be forced to pay $700 in January and then $250 for a 30-day supply the months following until they’ve spent $2,400 out of pocket, the new annual cap on covered prescription drugs.
You can see all the changes to your Advantage Plan in what is called the Annual Notification of Change (ANOC) document that should have been delivered in the mail around October 1st. In this document are a few pages that clearly explain the changes in your plan premiums and benefits from 2026 to 2027. If you haven’t looked at it, do so. If you don’t have a copy of your ANOC, call your Advantage Plan company and request one asap.
If there are going to be major changes to your plan’s benefits, shop for others that can keep the potential for larger out of pocket expenses to a minimum. In many markets, there are still options to get lower hospital co-pays and drug costs. But in some markets, huge hospital co-pays may not be avoidable. Those who are concerned about these increased expenses may want to consider a move back to Original Medicare and a Supplement that ensure bare minimum out of pocket medical costs, no more than the Part B deductible which is expected to be just under $300 in 2027, and a couple very small co-pays. And Supplements, per Federal regulation, can never have any changes in benefits other than a gradual increase in the Part B deductible.
But Supplements cost more than Advantage Plans and those who have them are experiencing some historic premium increases for the same reason hospital and drug costs are going up on Advantage Plans; companies have made very minimum profits, or even lost money, the last two years. Prior to 2024, it was unheard of for the Supplement plans and companies we recommend most to have double digit premium increases. In fact, it was common for there to be a period of two or three years where there were no increases at all. But since 2024, we’ve seen 12%, 15%, 18% and even 20% or more annual premium hikes.
If you’ve had these types of premium increases, especially if you’re currently on antiquated and/or overpriced Supplement Letter Plans C, F, or G, a move to another company, Innovative Plan G, or Plan N can save thousands of dollars per year in premiums. Just last week I lowered two married couples’ premiums $5,000 and $6,000 per year respectively. The Health Insurance Store is also helping people enroll in Advantage Plans that have the best value in premiums and better overall benefit structures.
If you have questions regarding today’s topic or would like to make an appointment during the Annual Enrollment Period that runs through December 7th, give the office a call, 724-603-403 or email me personally, Aaron@GetYourBestPlan.com .